China Debt Reaches Record High
China’s total debt rose to a record 237 percent of gross domestic product in the first quarter, raising risk of a financial crisis or a prolonged slowdown in growth, economists warn. Beijing has turned to massive lending to boost economic growth, bringing total net debt to RMB163 trillion ($25 trillion) at the end of March, including both domestic and foreign borrowing, according to Financial Times calculations.
“ China’s total debt rose to a record 237 percent of gross domestic product in the first quarter ”
While the absolute size of China’s debt load is a concern, more worrying is the speed at which it has accumulated — Chinese debt was only 148 percent of GDP at the end of 2007.
Since initiating market reforms in 1978, China has shifted from a centrally-planned to a market-based economy and has experienced rapid economic and social development. GDP growth has averaged nearly 10 percent a year—the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty. China reached all the Millennium Development Goals (MDGs) by 2015 and made a major contribution to the achievement of the MDGs globally.
With a population of 1.3 billion, China recently became the second largest economy and is increasingly playing an important and influential role in the global economy.
Visit: World Bank on China
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